PNOC-EDC increases capital to P15B to offer pref shares

Geothermal power producer PNOC-Energy Development Corp. (PNOC-EDC) is increasing its capitalization to P15.075 billion to facilitate the creation of 7.5 billion preferred shares.

"The increase in authorized capital stock by way of creation of preferred shares will enable the company to carry out a further privatization by allowing additional foreign and domestic investment," PNOC-EDC said in a disclosure to the Philippine Stock Exchange.

The preferred shares shall be voting, entitled to an eight to 10 percent cumulative dividend rate, redeemable but non-convertible.

The non-convertible shares will be redeemable at par in the event that state restrictions on foreign share ownership are lifted.

The planned sale of preferred shares is subject to shareholders’ approval at the annual meeting scheduled on June 14.

PNOC-EDC, a unit of state-owned Philippine National Oil Co., raised P16.7 billion from its initial public offering (IPO) in December last year.

The listing of PNOC-EDC is the biggest IPO that has been undertaken by a government owned and controlled corporation since oil refiner Petron Corp., its sistercompany, went public in 1994.

PNOC-EDC’s offering generated a lot of interest with about 85 percent of more than 16 foreign institutional investors subscribing to the international portion of the offer.

International Finance Corp., the investment arm of the World Bank, acquired shares equivalent to five percent of PNOC-EDC.

PNOC-EDC accounts for about 60 percent of total installed geothermal energy capacity in thePhilippines, supplying fuel to 12 power plants. Its four geothermal fields are located in Leyte, Negros Oriental, Bicol and Cotabato.

Majority or 75 percent of PNOC-EDC’s revenues comes from the sale of electricity while 23 percent is being derived from the sale of steam to power plants.